13-06-2023, 10:07 AM
Even "rich" people also don't necessarily have pots of money lying around with which to pay the proposed tax. Here is another genuine example from one of my clients:
Retired couple with a house worth c.$5M and a commercial investment property also worth about $5M. Their annual income is abut $200K from the investment property and a combined $40K superannuation. The husband was a sole-trader almost his whole career & and the wife was a stay at home mother, i.e. their accumulated "wealth" comes from his being paid by willing customers for work he's done himself (rather than having profited from the work of employees); they grew up very working class and kept that "scrimp & scrape" mentality right up until they'd paid off both the home and investment mortgages, which is why they've been able to accumulate what they have.
On their $240K annual income, they pay approx. $61K income tax; they also donate very generously to various charities (I see the donation receipts). Under the Greens' proposed policy, their income tax would reduce to about $57K, but they'd have an additional $150K "wealth tax" to pay, so total tax would be $207,000, leaving them $33K/year or about $635/week to live on.
Imagine if they'd instead chosen a more extravagant lifestyle, and so now only had a $1.8M house, and a $2M investment bringing in $80K per year. They'd have combined income of $120K (including super) on which they'd only pay income tax of $18K and would be under the wealth tax threshold. They'd therefore have net after-tax income of $102K/year or $1,960/week.
I don't know about you, but that doesn't sound remotely "fair" to me, and absolutely creates a disincentive for people to save and try to get ahead.
Retired couple with a house worth c.$5M and a commercial investment property also worth about $5M. Their annual income is abut $200K from the investment property and a combined $40K superannuation. The husband was a sole-trader almost his whole career & and the wife was a stay at home mother, i.e. their accumulated "wealth" comes from his being paid by willing customers for work he's done himself (rather than having profited from the work of employees); they grew up very working class and kept that "scrimp & scrape" mentality right up until they'd paid off both the home and investment mortgages, which is why they've been able to accumulate what they have.
On their $240K annual income, they pay approx. $61K income tax; they also donate very generously to various charities (I see the donation receipts). Under the Greens' proposed policy, their income tax would reduce to about $57K, but they'd have an additional $150K "wealth tax" to pay, so total tax would be $207,000, leaving them $33K/year or about $635/week to live on.
Imagine if they'd instead chosen a more extravagant lifestyle, and so now only had a $1.8M house, and a $2M investment bringing in $80K per year. They'd have combined income of $120K (including super) on which they'd only pay income tax of $18K and would be under the wealth tax threshold. They'd therefore have net after-tax income of $102K/year or $1,960/week.
I don't know about you, but that doesn't sound remotely "fair" to me, and absolutely creates a disincentive for people to save and try to get ahead.